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Council adopts corrective-action plan after auditors cite grant‑tracking and financial‑statement deficiencies
Summary
After a clean audit with two significant deficiencies, the council adopted Resolution 2004 to approve a corrective-action plan addressing grant tracking and financial statement preparation; staff will file the plan with the Secretary of State.
Monmouth City Council on Jan. 21 adopted Resolution 2004, approving a corrective-action plan required by state auditors after the city—s fiscal-year 2023-24 audit identified two significant deficiencies.
City Finance Director Susie Marston said the audit found no material weaknesses but noted two repeated significant deficiencies: grant tracking and the preparation of the city—s financial statements. "There were 2 significant deficiencies that they pointed out, which you'll find in the letter addressed to management and city council on page 27," Marston said.
On grant tracking, Marston said audit guidance recommends recording grant activity when expenditures occur and performing reconciliations; the corrective-action plan commits to at least quarterly reconciliations to ensure grant revenue is recorded when expenditures are made. "The recommendation ... speaks more to our internal process," Marston said, adding the finance office will conduct quarterly reconciliations and has already organized grant files to improve tracking.
Regarding preparation of financial statements, the auditors noted that many small governments lack in-house GAAP expertise and often have auditors prepare the statements; the Oregon Secretary of State—s audit division requires reporting of that fact as a control deficiency. Marston said the auditors recommend they continue preparing the statements while staff reviews them; the city will file a corrective-action plan with the Secretary of State by the end of the month. "The auditors' recommendation is for them to continue to prepare the financial statements and staff will continue to review," Marston said.
Councilors asked clarifying questions about the timeline and what "as it occurs" meant for recording activity; Marston said quarterly reconciliation is the practical implementation the city will use. Councilor discussion also emphasized the technical nature of GAAP and the cost tradeoffs of hiring a separate preparer.
Councilor Wilk moved adoption of Resolution 2004 to comply with ORS 297.466(2); Councilor McKeel seconded. The council adopted the resolution on a roll-call vote of 6-0. The mayor said the city will submit the corrective-action plan, signed by the city manager and finance director, to the Secretary of State along with minutes showing council approval.
